Often clients will visit our office to discuss estate and Medicaid plans to protect their home from taxes and the potential cost of long term skilled nursing care (i.e., nursing home costs). These conversations often lead to the ownership interest they have in their homes.
Real estate owned by more than one person can usually be described as one of the following:
- Tenants in Common,
- Joint Tenants with Rights of Survivorship, or
- Tenancy by the Entirety.
Tenants in common real estate ownership is created by a disposition of property to two or more persons unless expressly declared to be a joint tenancy.
This type of real property ownership entitles each owner to several rights including:
- the right to transfer their respective share during life,
- the right to transfer their respective share after death,
- the right to live in the premises without paying rent to the other owner(s), and
- the right to force a sale of the premises through a proceeding known as a partition action.
In a tenancy-in-common, each co-tenant has an equal right to possess and enjoy all or any portion of the property as if the sole owner. Consequently, nonpossessory co-tenants do not relinquish any of their rights as tenants-in-common when another co-tenant assumes exclusive possession of the property. A tenant in common has the right to take and occupy the whole of the premises and preserve them from waste or injury, so long as he or she does not interfere with the right of a cotenant to also occupy the premises. The occupancy by one of several tenants in common of an estate of itself does not make the occupant liable to the cotenant for rent of the premises or for use and occupation, so long as he does not exclude the other cotenants from the exercise of similar rights.
When property is owned as Joint Tenants with Rights of Survivorship, it transfers the co-owner’s share to the other owner(s) upon their death. To apply, the Deed must specify the words, “as joint tenants with rights of survivorship” after the names of the grantees. Any joint owners can change their form of ownership without the cooperation or consent of any other joint owner. A joint owner can re-convey the Deed to themselves, and mutate the ownership to be a tenancy in common.
To be continued….
Aaron E. Futterman, CPA, Esq. is a partner in the law firm of Futterman & Lanza, LLP with offices in Smithtown, NY and clients throughout Suffolk, Nassau, Queens, Brooklyn, Bronx, Richmond, New York, Westchester and Rockland Counties. He concentrates his practice to Elder Law, Medicaid Planning, Medicaid Applications, Estate Planning, Probate, Estate Taxes, and Estate Administration.